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Joint Secretary To The Government Of India And Others v. Khillu Ram And Another
Factual and Procedural Background
Shop No. 2 in Tripri township, Patiala, a government-built property, was jointly allotted in 1950 to Khillu Ram (first respondent) and to Tara Chand with his son by the Custodian of Evacuee Property. After Tara Chand and his son left the township in 1951, Teju Mal (second respondent) applied for their share. On 11 November 1959 the Managing Officer declared Teju Mal and Khillu Ram allottees of 2/3 and 1/3 shares respectively.
Khillu Ram appealed, and on 12 February 1962 the Settlement Officer set aside the Managing Officer’s order and remanded the case for decision under Rule 30 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955. The Assistant Settlement Officer, applying Rule 30 on 27 November 1962, allotted the entire shop to Khillu Ram because his verified compensation was higher. A revision filed by Teju Mal was dismissed on 5 September 1963.
Meanwhile Rule 30 was deleted with effect from 13 August 1963. Invoking Section 33 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, Teju Mal sought review. On 26 February 1964 the Joint Secretary, Government of India, held that the amended Rules (without Rule 30) governed the matter and ordered the shop to be sold.
Khillu Ram filed a writ petition in the Punjab High Court. The High Court found that deletion of Rule 30 did not disturb his accrued rights and quashed the Central Government’s order. The Union of India and allied authorities obtained special leave to appeal to the Supreme Court, leading to the present decision.
Legal Issues Presented
- Whether the deletion of Rule 30 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955, with effect from 13 August 1963, altered the substantive rights of Khillu Ram and Teju Mal in the pending dispute over Shop No. 2.
Arguments of the Parties
Appellants' Arguments (Union of India and Others)
- Rule 30 was purely procedural; its deletion affected only the mode of determining rival claims.
- Because procedural amendments operate retrospectively, the dispute should be resolved as if Rule 30 had never existed, requiring the property to be sold instead of allotted.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Pt. Dev Raj v. Union of India, AIR 1974 Punj 65; ILR (1973) 1 Punj 192 (FB) | A displaced person’s right to compensation in the prescribed manner, including rights under Rule 30, is substantive and cannot be taken away unless the amending provision clearly intends retrospectivity. | The Supreme Court adopted this reasoning to conclude that deletion of Rule 30 was not retrospective and did not impair accrued substantive rights. |
Court's Reasoning and Analysis
The Court characterised Rule 30 as part of the substantive right to obtain compensation by transfer of property, not merely a procedural mechanism. Rule 30 determined who among multiple occupants would receive allotment, thereby affecting the very entitlement to property. Although the appellants called it a “mode or manner” of payment, the Court held that the form and manner of compensation are integral to the right itself.
Rule 43 extended the provisions of Rules 25–34 (including Rule 30) to government-built properties, reinforcing that Rule 30 governed the present shop. The Court noted the absence of any language in the 1963 amendment making the deletion retrospective. Relying on the Full Bench decision in Pt. Dev Raj, it reiterated that substantive rights cannot be curtailed without explicit legislative intent.
Because the dispute arose and was decided while Rule 30 existed, the parties’ rights crystallised under that Rule. Consequently, subsequent removal of Rule 30 could not alter those rights, and the High Court was correct in reinstating the allotment to Khillu Ram.
Holding and Implications
APPEAL DISMISSED. No order as to costs.
The Supreme Court affirmed that deletion of Rule 30 does not retrospectively affect pending claims where rights had already accrued. The decision safeguards displaced persons’ substantive rights to compensation in the manner prescribed at the time their claims arose. While clarifying the non-retrospective effect of the 1963 amendment, the ruling does not create new precedent beyond this clarification.
A.C Gupta, J.— This appeal by special leave arises out of a proceeding under the Displaced Persons (Compensation and Rehabilitation) Act, 1954 (hereinafter referred to as “the Act”). The only question for determination in the appeal is whether the deletion of Rule 30 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 (hereinafter referred to as “the Rules”) with effect from August 13, 1963 made any difference to the rights of the parties concerned in this case. The question arises on the following facts.
2. Shop No. 2 in Tripri township in Patiala which is a government built property was allotted in 1950 to the first respondent Khillu Ram jointly with one Tara Chand and his son by the Custodian of Evacuee Property. In 1951 both Tara Chand and his son left Tripri to settle elsewhere, and the second respondent Teju Mal applied for allotment of their share in the shop to him. By his order dated November 11, 1959 the Managing Officer, Tripri and Rajpura, held that Teju Mal and Khillu Ram were in possession of the shop as allottees respectively of 2/3 and 1/3 shares therein. Aggrieved by the order of the Managing Officer, the first respondent Khillu Ram preferred an appeal to the Settlement Officer, Jullundur, who by his order dated February 12, 1962 set aside the order of the Managing Officer and remanded the case for a fresh decision under Rule 30 of the Rules. Rule 30 is in these terms:
“Payment of compensation where an acquired evacuee property which is an allotable property is in occupation of more than one person.—If more persons than one holding verified claims are in occupation of any acquired evacuee property which is an allotable property, the property shall be offered to the person whose gross compensation is the highest and the other persons may be allotted such other acquired evacuee property which is allotable as may be available:”
This rule has a proviso and an Explanation none of which is relevant for the present purpose. After remand the case was transferred to the Assistant Settlement Officer who found that the gross compensation payable to the first respondent was higher than that of the rival claimant, Teju Mal, and in terms of Rule 30 allotted the entire shop to the first respondent by his order dated November 27, 1962. A revision petition against this order made by Teju Mal was dismissed by the Deputy Chief Settlement Officer on September 5, 1963. In the meantime, as stated already, Rule 30 had been abrogated with effect from August 13, 1963. Teju Mal then moved the Central Government under Section 33 of the Act. Teju Mal's application under Section 33 was heard on February 25, 1964. The effect of deletion of Rule 30 was that the properties which were in the occupation of more than one person was to be put to sale. The Joint Secretary to the Government of India who heard the application under Section 33 held that the case should,be governed by the Rules as amended in 1963 excluding Rule 30, and”accordingly by his order dated February 26, 1964 he set aside the order allotting the shop to the first respondent Khillu Ram and directed the property in question to be put to sale. The first respondent filed a writ petition in the Punjab High Court for quashing the order passed under Section 33. The Punjab High Court held that the subsequent deletion of Rule 30 did not affect the existing rights of the first respondent and quashed the order of the Central Government made under Section 33. The correctness of this order is challenged in the appeal before us which has been preferred by the Union of India and several other authorities concerned with the administration of the Displaced Persons (Compensation and Rehabilitation) Act, 1954.
3. The only submission made by Mr Sanghi appearing for the appellants is that Rule 30 was a rule of procedure and its deletion in 1963 affected only the mode of proceeding by which the rival claims of Khillu Ram and Teju Mal was to be decided. It was argued that amendment of the Rules in 1963 deleting Rule 30 being procedural in character would affect the proceeding between the two respondents then pending, and their rights, it was submitted, should therefore be decided on the footing as if Rule 30 had never been in force. We are unable to accept this submission. The Act provides for the payment of compensation .and rehabilitation grants to displaced persons and matters connected therewith. Under the Act a displaced person has a right to get compensation in the form and manner prescribed by the Act and the Rules framed thereunder. Rule 30 is in Chapter V. of the Rules which deals with payment of compensation by transfer of acquired evacuee properties. Though the shop in question is a government built property and not an acquired evacuee property, Rule 43 in Chapter VI of the Rules which provides for payment of compensation by transfer of government built property says that the
“provisions of Rules 25 to 34 shall, so far as may be, apply to the transfer of any Government built property or Government plot under this Chapter.”
Rule 30 prescribes that where the property is in the occupation of more persons than one, it shall be offered to the person whose gross compensation is the highest. Clearly Rule 30 deals not with the form of procedure, but with a substantive right conferred by the Act on displaced persons. Mr Sanghi described this rule as only a mode or manner of payment of compensation. This may be so, but the form and manner in which compensation is payable is also part of the right to get compensation. Rule 30 is not an instrument or machinery for asserting the right conferred by the Act; it does not regulate the procedure for settlement of disputes concerning that right. Therefore, the deletion of the rule in 1963 cannot affect pending actions. The rights of Khillu Ram and Teju Mal must be governed by Rule 30 which was in force in 1959 when the dispute arose and was decided by the Managing Officer. A Full Bench of the Punjab and Haryana High Court in Pt. Dev Raj v. Union of India AIR 1974 Punj 65, ILR (1973) 1 Punj 192 considering the same question which arises for determination in this appeal, held that
“a displaced person has a right to the determination of his claim for compensation and its satisfaction in the prescribed manner and this is a substantive right”,
that so far as Rule 30 is concerned
“the right which a displaced person claims under this rule . . . cannot be adversely affected or taken away unless it is expressly stated in the amending provision, or the language of the Act unmistakably and unequivocably indicates an intention to that effect.”
This, in our opinion, is a correct statement of the law. Neither by express words nor by implication the amendment of the Rules in 1963 deleting Rule 30 has been made retrospective in operation.
4. For these reasons the appeal fails and is dismissed but without any order as to costs.
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